By Russ Britt

In a note to clients early Wednesday, Valiquette upgraded Walgreen
/quotes/zigman/245520/quotes/nls/wagWAG to buy from neutral, and said the recent drops in Walgreen’s price are disguising the pharmaceutical retailer’s potential. Shares surged more than 4% to $42.75 as a result.

“With [Walgreen] shares off its highs in recent days due to monthly comps that are no longer benefiting from flu, we upgrade [Walgreen] to take advantage of weakness and invest for ‘big picture’ positive developments at the company over the next 1-2 years,” Valiquette wrote.

He said the company is poised to take advantage of President Barack Obama’s health-care overhaul next year, should see stronger margins this year because it didn’t overspend on promotion and should start to realize some benefits as it integrates itself with privately held European drug retailer Alliance Boots.

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